A Market with a Negative Externality Will Reach an Efficient

question 83

Multiple Choice

A market with a negative externality will reach an efficient outcome when resources are allocated to those with the greatest willingness to pay. To help a market reach efficiency, the government can:

• A)tax consumers.
• B)offer consumers a subsidy.
• C)place a quota at the efficient level.
• D)All of these are options the government can take to help a market reach efficiency.

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Definitions:

Fight-or-Flight Response

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival, activating the sympathetic nervous system.

Tend-and-Befriend Response

A behavioral response to stress, especially noted in women, which involves nurturing activities and seeking social support.

Adaptive Value

The extent to which a trait or behavior positively benefits a species by influencing the evolutionary fitness of the species, thus leading to adaptation through natural selection.

Self-image

The mental representation an individual creates of themselves, often influenced by social interactions and personal reflections.